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While no change is recommended with respect to existing legislation providing so-called "backdoor” or mandatory spending authority, it is proposed that the rules be revised to provide that hereafter:
(1) The establishment of permanent appropriations (other than those for trust funds) be in order only in bills reported out by the Appropriations Committees, and
(2) All provisions in legislative bills, other than appropriation bills and those relating to trust funds, which authorize the use of contract authority, borrowing authority, establish benefit formulas or payment levels, or provide for any other types of spending authority, must contain language making this authority available only in such amounts as are prescribed in advance in
the regular or supplemental annual appropriation bills. As in the case of several rules changes described below, it is suggested this revised rule be waived only by a vote of two-thirds of the Members voting.
Since the use of contract authority and borrowing authority may be considered more suitable to the operation of some programs, it is recommended that where these methods are used they be accompanied by provision for the authority to be available only in such amounts as are within the ceiling resolution and as prescribed in advance in the regular or supplemental annual appropriations bills. The
exclusion of trust funds from the provisions of this proposed rule would be restricted to trust funds created by levying a special tax to finance the specific purposes of the trust fund, such as, the social security trust funds and the highway trust fund. 4. Rule of Consistency
Under the recommendations of the Joint Study Committee, amendments to either of the concurrent resolutions referred to above would be in order during the consideration of the resolution by the House or Senate. However, a “rule of consistency” would be applied with respect to any proposed amendment; that is, an amendment to increase an allocation must designate the source of the additional funds. Any proposed amendment not meeting the rule of consistency would be subject to a point of order. The purpose of this is to permit anyone to offer amendments to the concurrent resolution on the floor of the Senate or House, but in effect to require that any such amendment take a form which would indicate to the Members of the House or Senate that they are making their choice as to priorities.
The rule of consistency would require that whenever an increase in the allocaion with respect to any budgetary outlay or new budgetary authority was offered it must be
accompanied by specific provision for the source of the additional funds. The additional funds in such a case could be obtained from an equivalent decrease in the funds to be available with respect to any one or more of the other categories of budgetary outlay or new budget authority. Alternatively, an increase in one budget category could be provided for by increasing the aggregate limitation on budgetary outlays or new budgetary authority (or by a combination of reductions in one or more categories with some increase in the ceiling, so long as there is a match of the funds). This would mean that the funds in this latter case would come from either increased debt or additional revenue. The matching, or offsetting, of
funds in this case would have to be with respect to the current year in the case of the expenditure (or net lending) limitation and with respect to the same years insofar as the new budgetary authority limitation is concerned. The rule of consistency does not require a tax increase although this may be specified in an amendment seeking an increase in some expenditure category. However, provision is made elsewhere in the report for a tax surcharge to be included in the final appropriation wrap-up bill if the expenditures called for would result in a deficit which is higher (or a surplus which is smaller) than the Congress on economic or other grounds believes desirable. 5. Other Rules Changes to Insure Compliance With Limitations in
Concurrent Resolution A number of procedures, in addition to the "rule of consistency," are also recommended to assure compliance with the priorities established by the concurrent resolutions. One such enforcement procedure recommended is that action be completed on the first concurrent resolution providing the limitations before action is taken in the House or Senate with respect to any appropriation bill or other bill involving expenditures or net lending or new budget authority. However, in no event would it be necessary for actions on the appropriation bills to wait longer than May 1, since on that date, the President's budget limitations become applicable until Congress completes its action on the resolution. These procedures are designed to give assurance that spending bills which might be inconsistent with the limitations in the concurrent resolution will not be acted upon by the Congress before there is an opportunity to complete the congressional determination of overall priorities (or a substitute determination is in effect). It is not believed, however, that this will slow up the action on appropriation bills since subcommittee hearings and markups on a tentative basis can be carried out while the concurrent resolution is still being considered by the Congress. Furthermore, dates as early as possible have been established for consideration of the initial concurrent resolution in order to make it possible to act on the appropriation bills relatively early in the Congress. However, in any event, it has not been customary for appropriation bills to be considered much before the first of May, the deadline for the final action on the first concurrent resolution.
Another enforcement procedure recommended would preclude (that is, subject to points of order) amendments to the limitations on budget outlays and new budget authority in any legislation except the concurrent resolutions originating with the Committees on the Budget. This does not prevent the full membership of the House or Senate from working its will on the budget, however, since the Budget Committees are required to report at least two resolutions setting ceilings in each session of Congress (and a third in the following session of Congress) which would be subject to amendments offered by any Member of the House or Senate.
It is further recommended that appropriation bills, and any other bills involving new budget authority or budget outlays (or mandatory spending) be subject to a point of order if they call for new budget authority, or budget outlays, in excess of the amounts allocated for such purposes in the latest concurrent resolution. This would not of course preclude provision for additional outlays in the final appropriation bisl after the action on the final concurrent resolution of the session.
It is also recommended that any appropriation bill (or other bill making expenditures available) provide a limitation on expenditures, as soon as procedures have been developed for making outlay estimates accurate enough for the purposes of applying ceilings. One difficulty is that budget outlays are reported on a "net" rather than a “gross" basis. Where a net figure appears, it may have been reduced by proprietary receipts from the public attributable to the agency involved, by savings resulting from legislation proposed by the President, or by reductions resulting from anticipated sale of assets, including sales and repurchases of loans. Because the actual offsets from these items vary widely from the initial estimates, appropriation-bill-expenditure limits present difficulties. For these and other reasons, it is believed that for a time there should be experimentation with expenditure limits in appropriation bills rather than their specific requirement. However, to permit their use as soon as practicable, the authority to require such limitations would be accorded to the Committees on the Budget.
It is further recommended that in the committee report accompanying such a bill, there be a statement as to the expenditure level consistent with the appropriation provided. The report should also have been reviewed by the Committee on the Budget, and there should be a statement in the report as to whether this committee agrees that such an expenditure is consistent with the appropriation.
Finally, it is recommended, in order to assure compliance with the procedures outlined above, that a rule waiving points of order on any of the matters referred to above be permitted only upon the adoption of a rule by a two-thirds vote. This same rule would apply to the rule of consistency and the requiring of a tax surcharge in the wrap-up appropriation bill in certain cases.
D. JOINT STAFF OF THE BUDGET COMMITTEES
It is recommended that the two committees on the budget have a joint staff headed by a Legislative Budget Director. While the duties outlined above for the committees suggest that the House and Senate decisions with respect to total budget outlays or new budget authority initially might be different according to the varying views of the House or Senate, this would not seem to prevent the use of a joint staff. A joint staff for the two committees would enable both Budget Committees to benefit from the specialized knowledge and skills acquired by the staff in preparing and analyzing budget material for consideration with respect to the concurrent resolutions as they move through the legislative process in the two Houses and in the conference between the two Houses. It is essential that the director and his staff be highly trained, nonpartisan and professional because the Congress will need to depend heavily on them as to their skill and knowledge as well as to their objectivity.
It is recommended that the joint staff devote a significant proportion of its time to analyses for the committees, showing in specific cases the probable relationship of appropriations to expenditures. It is important that the committees have a full understanding of the different time intervals involved for different programs under which appropriations or contract authorization measures are converted into
spending. This type of analysis should be done by the staff in close consultation with the staff of the Office of Management and Budget.
The staff would also assist the Budget Committees in developing their views as to priorities of various programs. In addition, it is recommended that the joint staff continue the scorekeeping activities of the Joint Committee on the Reduction of Federal Expenditures. The continuation of this activity is believed to be important to the Congress, and it is believed that it is very desirable to have it continued by the new joint staff of the Budget Committees.
It is further recommended that the joint staff attempt similar scorekeeping with respect to the impact of appropriations and also of authorization programs for a period of up to 5 years ahead. This has already been started in the budget document but needs substantial expansion and presentation in more detail.
The Joint Study Committee also encourages the director and his joint staff to develop methods of applying computers and other analytical devices and analytical techniques to improve the quantitative and qualitative evaluation of budgetary requirements.
E. IMPROVEMENTS IN APPROPRIATION POLICIES AND PROCEDURES 1. Overall consideration of budget
At the beginning of each session, it is recommended that the Appropriations Committees follow the procedure of reviewing budget expenditures and budget authority on an overall basis. On the basis of this study, it is hoped that the Appropriations Committees will be able to make recommendations to the Budget Committees, both as to the overall limits, expenditures, and new budget authority and also for the division of the expenditures and new budget authority among major program categories. Presumably, the committees would want to indicate their views about how the funds should be divided among the various appropriation bills they plan for consideration during the year and quite probably as to the division among agencies or programs within these bills. The more the Appropriations Committee can do in this regard, the more effective will be the congressional consideration of priorities under the proposed new procedure. 2. Use of Multi-year Advance Appropriations
One factor giving rise to the practice of granting budget and spending authority in legislative bills, other than appropriation bills, has been the failure of the annual appropriation process to be responsive to the long-range planning requirements, and certainty of financing, required by state and local governments and individuals, especially in grants-in-aid programs. It is believed that these requirements can be met within the appropriation process by provision for multi-year advance appropriations.
It, therefore, is recommended that in implementing the above procedure for prescribing in the annual appropriation bills the amounts to be available (pursuant to the authorizations provided in the legislative bills) that the Appropriations Committees provide for one,
two or possibly more years advance fundings in cases of this type depending on the particular requirements of the program involved. It will also be necessary in these cases that the basic authorization bills providing for the new budget and spending authority make similar provision for multi-year advance authorizations, commensurate with the advance funding.
The importance of having the joint staff prepare up-to-date projections of outlays and new budget authority for 3 to 5 years ahead is emphasized by this proposal. At the same time, advance authorizations and appropriations should be reserved for programs where this is important in order to protect congressional flexibility in future years from premature rigidity. 3. Rescissions
As has been indicated in this report, one of the major difficulties in congressional (or executive) control of the budget is the growth in the “relatively uncontrollable” items in the budget. Uncontrollability in this context refers to the inability of the Federal Government to make current adjustments in the Government's level of spending. The uncontrollability of expenditures has grown over time, both in terms of absolute amounts and also as a percentage of the total Federal budget. Relatively uncontrollable budget outlays have grown from $100 billion in the fiscal year 1967 to an estimated $202 billion in the fiscal year 1974. This represents a growth from 63 percent of the total budget in 1967 to 75 percent in 1974.
Certainly an important reason accounting for this uncontrollability of expenditures in any given year is the kind of new budget authority often provided in earlier years. Unexpended balances of authority enacted in prior years are estimated for the end of fiscal year 1974 at $306 billion (of which $155 billion represents Federal funds). Much of this total is earmarked for specific uses and is not available for new programs or discretionary use either by the Executive Department or by the Congress. Of the $306 billion of year-end balances, $119 billion is obligated for specific purposes. Of the $187 billion remaining, social insurance trust funds and civil service retirement and related funds account for $102 billion, and although technically not obligated, in effect they are. Other large unobligated balances are for loan insurance (standby, back-up and reserves for losses and debt redemption) and construction and land programs. These two categories which also would be difficult to shift to other programs account for $38 billion of the remainder.
The committee has recognized that, in order to obtain control over the budget, these uncontrollable items not only make it necessary to impose limitations with respect to the expenditures for the current year but also to gain better control over budget authority as well. This will enable the Congress gradually to regain control over much of the relatively uncontrollable expenditures. This can be aided and assisted by giving the Appropriations Committees the right to recommend rescissions (deletions) in the budget authority carried over when it appears appropriate. The committee recommends that as a device to aid in gaining better control over funds in the “pipeline”. 4. Consideration of reductions in appropriation bills first
At the present time, when appropriation bills are considered on the floor of the House, amendments to the bills are considered in the order in which the amendments occur in the legislation under consideration. However, if appropriations in an appropriation bill or expenditures attributable to the appropriations cannot exceed the amount allocated